Word of the Week

Golden Parachute

An "excessive" severance payment to an executive. Recent coverage of the Economic Stabilization Act of 2008 (aka the "bailout bill") mentioned that Congress would restrict the "golden parachutes" available to companies that sold troubled assets to the Treasury. Many assumed that the media were just speaking informally, but in fact the "Golden Parachute Rule" is enshrined in the Tax Code -- imposing a 20% excise tax (on top of income tax) on any severance payment that is more than 300% of the executive's recent average annual pay.